Deficit Commission LIkely to Lack Votes

It looks like the 18 member lacks the required consensus of 14 votes for its plan to force an up or down vote in the Congress. Already there are six no votes on the commission.

“No” votes include the three Republican House members on the commission – Reps. Paul Ryan, Jeb Hensarling and Dave Camp, along with Democratic Sen. Max Baucus of Montana and Democratic Rep. Jan Schakowsky of Illinois. Andy Stern, former chairman of the Service Employees International Union, also said he would vote against the proposal, and he proposed his own plan that called for larger tax increases and diverting some spending into infrastructure.

This is unfortunate but foreseeable. Of course Andy Stern, SEIU mouthpiece, will vote against, but I was surprised at GOP defections. I was inclined to excoriate any Republicans who didn't vote for the plan, thinking it showed lack of serious purpose, but Paul Ryan's comments give me pause. He has been doing the hard work of formulating policy in opposition to Obama and taking some heat for it, so I think we should listen to what he has to say.



I like his take on the situation, that it makes the spending on health care worse and accelerates Obamacare. Another quote from Ryan:

"I just don't think this thing has the ability to last in policy, and it simply buys us time. I'd rather fix the problem, with the Boomers starting to turn 65 this year, fix it once and for all so we can really get this thing fixed," he said. "But again, I don't want to be too critical of it because it's a good effort on Erskine's part and Alan's part and they've done a lot of good work."

On the other hand, how is progress going to be made? Piecemeal legislation isn't going to get the job done, it is too big a challenge. Maybe the Republicans need a counter-proposal that deals with the deficit. From my previous lengthy post on this subject, I show that spending on entitlements are killing the federal budget. Only addressing social security is insufficient to solving this problem. With regards to Medicare, I have to ask, if the purpose of medicare is to protect the elderly who are also poor from runaway medical costs, why is it offered to every American? I think we will need to means test these programs in order to curb costs. I also hope that it undermines support for them in the long run, but that is just my Machiavellian plotting.

Converting B-Daddy on the Fed

W.C. Varones and Jr. Deputy Accountant have been a harsh critic of the Federal Reserve. I have not been on this bandwagon, seeing the reserve as a necessary evil, kind of like government itself. However, the need for transparency and oversight at the fed is revealed by a little transparency. The Fed has spread around money to foreign banks and U.S. companies that are not even banks in a disgusting display reminiscent of sailors on shore leave, except sailors don't print their own cash.

From the article:

When Lehman Brothers failed Sept. 15, 2008, borrowers started to line up for the PDCF. That day, the single-biggest loan went to Barclays Capital, the investment bank of U.K. lender Barclays PLC that eventually bought a big piece of Lehman out of bankruptcy. Several foreign banks benefited from the program, including Deutsche Bank, BNP Paribas and UBS.

Apparently, we have Bernie Sanders to thank for leading this fight.

Thanks to Mr. Sanders, who has been leading the fight to make the Fed more transparent, the Government Accountability Office will conduct an audit of the Fed's emergency actions going back to the start of the crisis in 2007.

The fed claims that it was responsible for averting economic disaster and that it made money on the operations.

The Fed and major Wall Street players defended the crisis lending actions in remarks Wednesday. Dallas Fed President Richard Fisher said the central bank "stepped into the breach" in its role as a lender of last resort.

"We took an enormous amount of risk with the people's money," Mr. Fisher said, speaking at a community forum in Killeen, Texas. But the crisis lending programs are now all closed, he said, "and we didn't lose a dime, and in fact we made money on every one of them."

I await the audit findings before I hit the "believe" button.

Canadian Health Care - Priceless?

Minimum $2,000 to guarantee that a woman's doctor will be there for the birth. And it can go up to $10,000.For general surgery, the cost runs between $5,000 to $7,000 to jump the wait list into the operating room, . . .

. . .knowing you are getting a qualified doctor in a timely manner. . . priceless. Carpe Diem has the lowdown on the superior, FREE Canadian single payer health care system.

Exit question, with all of the incentives to put private insurance out of business, how long before Americans are bribing doctors?

Obama Hits the Easy Button

Today the President announced a proposed pay freeze for Federal workers for the next two fiscal years. This was on my list of easy ways to cut spending immediately. Glad the President was paying attention. From my previous post:

Really easy spending cuts:

• End all stimulus spending. Return all unspent funds to the Treasury.
• End all TARP spending. Return all unspent funds to the Treasury.
• Freeze the pay of federal workers, since the CPI stayed flat last year, so too should have federal pay, but it went up. (Full disclosure, I work for the federal government.)
  
• De-Fund all of the committees, czars and regulatory boards for Obamacare.
• De-fund the Department of Education, for starters, since it doesn't educate anyone.

We presume that a majority of federal workers supported Obama, certainly their unions did. One of those unions immediately opposed the move, of course. Too bad, federal workers are supported by taxpayers who are also suffering, a pay freeze is unfortunately equitable under those circumstances.

Interestingly some Democrats didn't get the message from this month's election and are also opposing pay cuts.

Republicans welcomed the pay freeze but it drew silence from most top Democrats.
. . .
Representative Steny Hoyer, the No. 2 Democrat in the House, offered a lukewarm reaction to the pay freeze. Hoyer, whose Maryland district includes many federal workers, said he would "review closely President Obama's proposal.

At least they had the good sense not to directly oppose.

There are those who will say that this does not go far enough in controlling federal spending. I wholeheartedly agree; but it's a step.

About Those Social Issues

Leslie alerted me to a move by some Tea Partyers to take a turn towards social issues. I am somewhat of a social conservative, at a time when those issues are being forced to the back burner by the severity of the fiscal issues facing the country. The Tea Party has amassed an impressive coalition that has seized both the imagination of the country and many seats in state and national legislative bodies. However, those who believe that we should somehow turn to social issues, when the hard work of dealing with the fiscal crisis has not even begun are insane. Almost no progress has been made on the most pressing fiscal crisis our country has faced since the Great Depression. We cannot afford to lose any allies in this fight. Picking fights with gays, or any other group that is supporting our core issues is a costly waste.

Further, most of the issues that the Tea Party is emphasizing are consonant with the values of social conservatives. A less intrusive government that does not force politically correct values on the people would certainly help our cause. Consider these items.

• Obamacare is almost sure to expand federal subsidies for abortion. It was the only piece of legislation in at least the last decade to do so. By emphasizing opposition to Obamacare, not abortion per se, we bring along allies we would never have gained.


• The state insurance pools under Obamacare are almost certain to fund and subsidize insurance for same sex couples and increase the pressure on the states to recognize "gay marriage."


• As a general principle, the expansion of government crowds out deference to social norms, as government holds sway over an ever increasing portion of our lives. This crowds out the use of social norms that our reflect Judeo-Christian heritage as a means of regulating behavior. Consider pornography, which has many ill effects. We will never make progress in controlling it through purely legal means, we have centuries of experience on that front. But today, with increasing state intrusion into every aspect of our lives, down to how much salt we consume, the attitude among the young is "hey, it's not illegal or regulated, so it must be ok." We will have increasing difficulty making the case for traditional values in a society where the government is the arbiter of all decisions large and small.

The SoCal Tax Revolt Coalition (SCTRC) gets it right with the press release below. If you don't want to read it all, the money quote follows:

SCTRC wants balanced budgets, smarter spending, shrinking deficits, support for the free market, less intrusive regulations, lower taxes and fees, and transparency. Judson Phillips represents himself, not the thousands of unique, independent local tea party groups all across this nation, including our local one.

Click image to view, you may have to click again to enlarge.


Remember, "Government growth threatens our liberty and our prosperity." As Peggy Noonan put it, the Tea Party members know this, the hour is late. If we don't deal with the fiscal crisis all of our other issues will be mooted by the looming disaster.

Image at upper right courtesy of Temple of Mut.

Tunnel at the Border - Drugs are Big Business

Take a look at this video regarding the most recent tunnel under the border funneling drugs into this country. This the second tunnel discovered in the last few weeks.





Link here for another report.

The tunnel's length and sophistication presuppose considerable wealth and incentive to literally build an underground railroad into the United States. In a related note, hardly a day goes by that we don't see a news story about the horrors visited upon the Mexican people by the drug cartels. As many Arizonans will point out, this violence is spilling over into the United States.

I am sick of this, because the answer to this issue seems obvious to me. Drug legalization that would allow cultivation of marijuana on U.S. soil would go a long way to eliminating this violence and lawlessness, because the profits and the violence stem from the fact that this is a business operating outside of the rule of law.

Why should the Tea Party care?

• The drug trafficking is making the border more difficult to secure. Securing the border will be expensive and difficult; it needs to be done, but making the effort more so is hardly in our best interests. The same tunnels that move marijuana across the border can move illegals as well, but there isn't enough cash in the moving of people to make it worthwhile to build tunnels for that purpose alone.
  
• We are increasing the costs of law enforcement. First, we spend on interdicting the supply of drugs. Second, gangs on both sides of the border obtain large sums of cash to purchase weapons and fund other illegal activities.
• As a matter of principle, the drug laws are an excessive intrusion into the lives of consenting adults. I get that the use of currently banned drugs may not be a net positive for many people, but so what? So are cigarettes, alcohol and video games. We need to ratchet back the amount of control we allow any level of government to exert over our lives. If this isn't a core Tea Party principle, I don't know why I'm wearing that yellow flag on my shirt.
  

Weekend Music Chill

The California interior has been on my mind of late, not sure of all the reasons why, watching the movie "The Book of Eli" reminded me of it and the fact that its a good time of year to visit Joshua Tree does so as well. Gram Parsons is famously associated with the area, see the wikipedia article for more information.

Hauser's Law and the Deficit

Today's WSJ has more insight on Hauser's Law, on which I have previously posted. In summary, we have seen empirically over the last 80 years that regardless of top marginal tax rates, the federal government's tax receipts as a share of GDP always falls just short of 20%.



This evidence is important to consider when trying to reduce the deficit. It becomes clear that raising marginal tax rates will not increase federal tax revenue, so we shouldn't even try. Further, evidence from other countries is that the efficiency of the tax code matters to growth. The Tea Party should be supporting a simpler and fairer tax code, along the lines of the compromise that Reagan reached with Democrats in the 1980s.

Eliminating all manner of "tax breaks" for businesses and individuals will be part of the difficult work ahead. Special interests, and I include myself as a homeowner, enjoy these benefits. But if the structure were simpler, with lower rates, we would all be better off. Further, eliminating complexity in the tax code reduces corruption and the appearance of corruption as fewer interest groups have the ability to gain benefits through the code. A simpler tax code also directs resources based solely on economic benefit, not tax consideration. A simpler tax code also eliminates the waste of businesses time and money in trying to "game the system," freeing management time to focus on improving profits.

From Hauser's article on why higher marginal rates (which are always coupled with complexity) work against the economy:

Higher taxes discourage the "animal spirits" of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.

Tackling the deficit means reducing spending and increasing federal tax receipts. But we can only do so by growing the real economy. A simpler tax code with lower marginal rates is consistent with Tea Party principles of a less intrusive federal government. Further, the growth in tax revenues that such policies cause help reduce the deficit.

Happy Thanksgiving

Light blogging today as Mrs. Daddy and I prepared for Thanksgiving. Special props to our guest Jesse, who brought some Rolling Thunder IPA and Golden Glow Pale Ale from Central Coast Brewery in San Luis Obispo. A little music appropriate to the holiday follows:

Kim Jong Il - Pithy Analysis

Kim: "He looks pretty, but does he have game?"

Dean links to pithy analysis by Secular Apostate answering the question "Is Kim Jong Il Crazy?" The answer is a resounding NO.

The last three Administrations, Clinton, Bush, and Obama, have negotiated with the North Koreans as if the North Koreans were serious negotiators. In fact, the “incandescently intelligent” Barack Obama once said: “you do the game theory and calculate ways to contain”. “Do” the game theory, indeed. The natterings of a garrulous buffoon.

It reminded me of a WSJ article by Bret Stephens from a year ago regarding the aforementioned dictator:

But a tyrant’s training is no less useful for the manipulation of free men. What keeps an abused and subjugated people in line is the constant fear that things could suddenly get dramatically worse, along with the sporadic hope that things might also get marginally better. So long as most people feel they have much to lose and something to gain, you will have them in your power.

Ditto for your dealings with the outside world: The key is to keep them on the back foot, to furnish continuous evidence of what “dramatically worse” and “marginally better” look like, and to oscillate between the two in a way that always leaves a margin of doubt about your real intentions.

Regarding game theory, Kim is playing a weak hand adeptly, he keep making big bets because he knows that his adversary is extremely risk averse and unwilling to accept even small losses, so we keep folding our hand. Once again, Obama needs to sue his alma mater for failing to educate him; if he knew anything about game theory, he would also respond asymmetrically.

In fact, the U.S. could exert considerable pressure on Kim Jong Il. Much of his power comes from his ability to distribute small luxuries and favors to the party. These in turn are dependent upon foreign currency, which comes from counterfeiting, illicit sales of arms, and the drug trade. We have the means to crack down on these activities and also preventing the money laundering that then feeds the North the means to fly in lobsters to Kim's Siberian train to Moscow, for example. I have previously pointed out that we have employed such a strategy successfully.

Putting the squeeze will of course cause the North to ratchet up the saber rattling, but we can call Kim's bluff, because squeezing on these illegal activities is not a direct response to his provocations. Indeed, on the military front, we could appear to remain very passive, to keep the South Koreans from complaining. Why we don't employ this strategy is beyond me, but don't expect Obama to understand the game theory behind it.

I Think Not

This morning's Wall Street Journal headline said:

Feeling Blue: Aggressive Airport Screening Here to Stay

I repeat, I think not. This will end one way or another, the only question is how. The American people and even the employees of the TSA are not going to put up with aggressive groping forever. My worry is that it will end in tragedy. Public humiliation does strange things to people and is a sure fire way to get the adrenaline flowing. I am worried. This is another reason why I posted yesterday on a non-violent means to protest these procedures. If people sing in line, it could help them handle the emotional response to the abuse, and make them feel less powerless. More importantly, it well help heap ridicule on our government's over reach. Ultimately, I would like to see this procedure end because our political leaders feel to embarrassed to allow it to continue.

From yesterday's comments, here are some more suggestions for singing in line.

From Temple of Mut: James Cagney singing Yankee Doodle Dandy (embed not available).

W.C. suggests whistling, a la "Bridge over the River Kwai."



And one more I thought of:

More Love for Local Tea Party Activism

Tea Partyers, there is a must read in today's WSJ about Tea Party activists setting their sights on local issues. We already had some local success in San Diego with the defeat of Propositions A and J, the half-cent sales tax increase and parcel tax increase, respectively. The article makes an important point about the need to grow bench strength of local school board members and other locally elected officials to give the Tea Party future leaders. It also points out that our influence can often be even greater at the local level. A few key quotes:

Tea-party groups in Pennsylvania, Delaware and Michigan have recently voiced plans to have members run for local town boards in 2011—a bid to start a farm team of politicians who can move up to higher offices. . . . Now, the Philadelphia Tea Party Patriots plan to launch the "Watchman Project," in which members will be assigned to attend local government meetings, monitor meeting minutes and then report back to the group, Mr. Reimer said. "If there is a particular vote coming up that we support or oppose, we would all show up to influence what is going on," he said.

Locally in San Diego, Dawn, Leslie and Sarah have been very active in keeping us appraised of political developments, but it will take more of us monitoring city council meetings, school board meetings to keep the politicians honest.

Photo courtesy of LeftCoastRebel.

Protesting the TSA in Song and Verse

I have been conflicted as to how to protest the abuse of average Americans at the hands of the TSA at our nation's airports, but at the same time, I am a firm believer in the rule of law. Shane rightfully points out that the search procedures may very well be unconstitutional, but absent a court order, that doesn't help your average citizen. I don't want to ask people to suffer $10 grand fines. Dean also points out that the TSA agents are none too happy themselves with the position they are put in. To quote extensively from BWD, quoting TSA employees at TechDirt:

"Molester, pervert, disgusting, an embarrassment, creep. These are all words I have heard today at work describing me, said in my presence as I patted passengers down. These comments are painful and demoralizing, one day is bad enough, but I have to come back tomorrow, the next day and the day after that to keep hearing these comments. If something doesn’t change in the next two weeks I don’t know how much longer I can withstand this taunting. I go home and I cry. I am serving my country, I should not have to go home and cry after a day of honorably serving my country."

My fellow Americans, what is to be done? Stay ungovernable my friends, but within the bounds of law and respect for our fellow Americans. Here is my suggestion. Sing. That's right, we need to sing loudly and long while in line. It will disrupt the ambiance of submission, but is itself not unlawful. Maybe we could start with the pledge of allegiance, to remind our fellow citizens, employees of the TSA, of their duties under the constitution. As a federal employee I know I took this oath.


We could then go with patriotic and traditional songs while while waiting in line. Imagine, the power of showing our government that we are not submitting willingly. There is no law against this action of singing and reciting, but it would show our solidarity against this intrusion into our privates and private lives.

I offer some YouTube clips of suggested material for traveler's consideration to say/sing while waiting for their share of abuse at the hands of our government. (Just a reminder: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it. . .")




We might want to raise our voices when we say "liberty and justice for all."




And to get our left of center friends on board, because at the end of the day, they love freedom too, here is a little reminder that the President promised something different than whole body groping at his inaugural.



Since we are marching in a long line:



Because we need His help now more than ever, because our greatest adversary has become our own government:



Maybe a stretch, but the 23rd Psalm comes to mind, considering the valley of the shadow of death, but is probably too religious.

I hope others consider this a worthy idea. Don't know if I personally will have the opportunity to put this into practice, but I want to hear your thoughts on improving this form of protest.

Another Small Step - 401(k) for San Diego City Employees

Apparently the defeat of Proposition D has concentrated the minds of local politicians. Mayor Sanders announced a plan to put new workers into defined contribution plans yesterday. Labor leaders were of course skeptical, but made one comment with which I can agree.

Lorena Gonzalez, head of the San Diego-Imperial Counties Labor Council, said ending pensions for new hires does nothing to solve the city’s current budget crisis. . .

But you have to start reforms somewhere. Further, by changing to a defined contribution plan, the city will stabilize its future costs for pensions. Changes in market conditions won't cause changes to the city's required funding profile. Defined contribution shifts the risks to the employees, which is why the labor unions oppose. However, I am very happy to be in a defined contribution plan at my work. I think it will actually provide far better returns than the defined benefits portion of my plan, so I don't understand why labor leaders oppose it.

Carl DeMaio also pointed out that the plan does not really solve the current pension crisis.

Another Proposition D critic, Councilman Carl DeMaio, said the mayor’s plan is a good first step but doesn’t go far enough. He has proposed ballot measures that would cap the city’s labor costs and freeze salaries to control pension expenses.

“The bandwidth in the public will gravitate toward the plan that actually solves the problem,” DeMaio said. “I’m supportive of the 401(k) for new hires. It’s just that it’s not complete. It falls short of what the city needs ... You have to do a lot more.”

But the momentum is shifting in the debate over pensions and budget woes. It is becoming widely accepted that most of the problems we face with government deficits must be solved through spending cuts, however they are achieved.

The mission of the Tea Party is to hold our politicians' feet to the fire and push for real reform and budget cuts.

So Far, So Good

The New York Times is reporting/pillorying Republicans for obstructing Democrat legislative initiatives in the lame duck session.

In the House, Republicans united to defeat an initial attempt to extend unemployment pay for the long-term unemployed. In the Senate, Republicans used procedural tactics to force the Democrats to consume much of the week inching ahead on an otherwise popular measure to improve the food safety system. The Republican leaders of the Senate and House canceled a tentatively scheduled postelection meeting at the White House with Mr. Obama, a move Democrats viewed as a slight.

Characterizing S510 as popular is like calling high tariffs on sugar cane popular, no one is opposed because so few are aware of the issue.

Good for the Republicans for pushing any major changes into the new year. Exit question, should the Republicans let the Bush tax cuts expire if they can't get a decent compromise with Democrats? The pro is that they will be in a better negotiating position after the new year, the con is that the withholding tax for many Americans will go up until they pass a bill.

Along with the Senate GOP resolution to end earmarks, this is a good start.

A Small Consolation

. . . arising out of Big Sis' whole "grope or porn" dilemma is that all around tool and faux populist Jesse Ventura has announced he will not be flying commercial any more.

. . . the former governor of Minnesota and host of the popular TruTV show, Conspiracy Theory with Jesse Ventura, announced he will no longer use commercial airlines due to the egregious abuses of the TSA and the government. Ventura said he made the decision to avoid public aircraft after he found himself becoming too comfortable with being routinely searched.

Does that mean we won't be hearing more trutherisms on the ironically titled TruTv (TurdTV)? Since Jesse used to work for the government as a member of the Navy and then as governor of MN, doesn't he see how he should actually be the number one dude subject to all manner of intrusion search?

I don't have time to be groped.

Weekend Music Chill

From one of my favorite albums of all time, this weekend we are playing U2 performing "One" from the Achtung Baby album in 1991. This album got played over and over again on the final patrol of one of the "41 for freedom" boats, but it still wears well. After listening to the song's bittersweet lyrics and it's title, I can't help but thinking about Obama's fall from role of savior to just another crazy politician.

Fed Indirectly Subsidizing California Debt

Newest BFFs.

In a recent post, KT opined that the Fed's Quantitative Easing would result in California "skipping out on our test" because the Fed could buy up California bonds as easily as U.S. Treasuries. (Go to the comments to see the full discussion.) However, the Fed's purchase of U.S. Treasury bonds is already having an indirect subsidy effect on California bonds. From the WSJ's Meredith Whitney:

Over 20% of California's debt issuance during 2009 and over 30% of its debt issuance in 2010 to date has been subsidized by the federal government in a program known as Build America Bonds. Under the program, the U.S. Treasury covers 35% of the interest paid by the bonds. Arguably, without this program the interest cost of bonds for some states would have reached prohibitive levels. . .
Over the years, however, federal government transfers have subsidized business-as-usual state spending not covered by state tax collections. Today, more than 28% of state funding comes from federal government transfers, the highest contribution on record.

The Fed is printing money to temporarily keep interests rate down and buying the U.S. debt, this money is then transferred into the Treasury which a. subsidizes California debt and b. pays for direct subsidies from the federal government to the states.

We have slowly dismantled the federal system, to our detriment. The bad acting by New York and California is being paid for by all of the states. Hopefully the new Republican majority in the House of Representatives, with scant members from CA or NY will put the brakes on these subsidies as part of the effort to clean the federal deficit. Maybe those of you reading this column from outside my state could put some pressure on your Congressman to end the transfers. After all, our bad behavior is just contaminating the nation.

Quote of the Week - "Don't Touch My Junk"

Charles Krauthammer points out the larger meaning of "don't touch my junk" in today's column:

Don't touch my junk is the anthem of the modern man, the Tea Party patriot, the late-life libertarian, the midterm election voter. Don't touch my junk, Obamacare - get out of my doctor's examining room, I'm wearing a paper-thin gown slit down the back. Don't touch my junk, Google - Street View is cool, but get off my street. Don't touch my junk, you airport security goon - my package belongs to no one but me, and do you really think I'm a Nigerian nut job preparing for my 72-virgin orgy by blowing my johnson to kingdom come?

Indeed. Stay ungovernable my friends.

I Felt Proud That I Did My Part

Nancy Pelosi thanks all of us in the Daily Kos community for our support.

I felt like I was there. I repeat my note of encouragement.